For All Nails pt. 142: Yet More Really Boring Stuff
>From the Statist
13 June 1975
Once again, the west shore of Lake Michigan may be graced by the
world's tallest building. The Michigan City Planning Board has given
the go-ahead for a 115-storey rask in the heart of downtown Michigan
City that would soar to 1,650 feet, or 2,100 feet with the antennas on
the top. That is well above both the current record-holder, the Pemex
Pyramid in Henrytown, and the former champion, Michigan City's own
Kramerica Building.
The developer, North American Realty, says it has financing in place
for the £500 million project and commitments to lease a chunk of its
765,000 square feet of office space. The building will contain 40
floors of condominiums; the developer expects some units to fetch £1m
or more. It also counts on revenue from two 450-feet antennas
broadcasting vitavision signals.
Will it be built? One hurdle is the economics of rasks. Ricardo
Verde, a property economist at the University of Indiana, argues that
they are disproportionately expensive to build and operate. And this
project carries two more uncertainties.
First, recent reforms to the way the government allocates airwaves in
North America make it difficult to work out the value of the
broadcasting antennas. Second, the building's 360 residential units
will be in the heart of the business district, an area that has long
emptied itself at the end of the working day. [1] Many property
experts wonder whether the investors, described so far only as "a
consortium of financial institutions from west of the border", will
really open their chequebooks for such a risky venture.
Is this a sign that the commercial-property market has once again lost
its head? Probably not. Most analysts consider the Michigan City
market to be healthier than ever. Despite North America's prolonged
economic expansion, the city has had virtually no new top-quality
office construction since the beginning of the 1960s. Demand has
finally caught up with supply; vacancy rates are at record lows. In
addition, last year's growth in real-estate investment trusts promises
to bring more transparency to an industry traditionally characterized
by inside deals.
Tobias Scott, president and CEO of North American Realty, hopes to
start construction of his record-breaking rask by the middle of next
year. And even the sceptics concede that the design would be an
impressive addition to what is already North America's best urban
skyline.
[1] This is not accurate. An OTL visitor to downtown Michigan City
in 1975 would find plenty of after-hours activity. Tobias Scott knows
things that the Statist correspondent does not.